DC interest costs plunging, deflator at zero

The red line, interest costs plunging in DC.  We are paying off the high interest rate Kanosian spending we were stuck with, courtesy of the Krugman, Delong crowd. They urgd us to borrow, saying that 3% plus ten year rates were cheap. Now the ten year bond costs 2.3%, inflation is at zero (the blue line).

That red line sitting at a mean of 420 billion per year in interest costs from 2010 through 2014?  Those high costs were all the result of the 'debt is what we owe ourselves' crowd. See it peak just two quarter ago in 2014? That is what caused our current recession. Running that much of the economy through the Goldman Sachs debt machine so soon required a contraction of the economy, and we are in contraction.  Let's just hope the current Kanosian recession cycle is mild, but at least we know why we are here.

Now the key here is California, will the Flounder succeed in raising taxes some 30%? If they manage that, then the public sector pensions go to hell.